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Reprieve Over

By

Mark Gongloff

Jun 15, 2011 4:23 pm ET

AP

Just when it seemed the stock market was clawing its way toward a winning week, its first in seven, the Greek crisis flared anew, and suddenly the market is on track for a seventh straight losing week.

The Dow fell 1.5%, or 179 points, to its lowest close since mid-March. The S&P 500 fell even harder, losing 1.7%.

Even Pandora Media, wandering into the market on its first day of trading, had a non-LinkedIn-like 9% gain.

There are still two whole days left to the week, of course — still plenty of time for the market to come out of it a winner. A solid resolution, though likely only temporary, to the Greek crisis could be a catalyst.

But for now the guts of the market don’t promise much of a rally any time soon. How’d the leading-type indexes do? Not well. The Nasdaq and the Russell 2000 each fell about 1.8% and are back into the red for the year.

The S&P 500′s worst performers were energy stocks, down 2.5%, as crude oil tumbled more than 4% to below $95 a barrel. Materials stocks fell 2.3%, and financials fell 2.2%. That drop in financials is troubling, as it suggests there could be more to come.

Similarly, the euro’s sharp decline, down nearly 2% to below $1.42, is another indicator of wider risk aversion than we’ve seen so far in the US stock market’s six-week losing streak.

It suggests investors are starting to think about the systemic, Lehman-like risks of a Greek default. Against the backdrop of weaker economic data in the US, this is not a recipe for a roaring rally any time soon. We won’t even mention how the return of violent anti-austerity protests in the streets of Athens raises eerie parallels to the flash crash last May.